PREET BHARARA, the United States Attorney for the
Southern District of New York, announced that JOSEPH P. COLLINS,
formerly the principal outside attorney for the defunct financial
services company Refco, was sentenced today to seven years in
prison for his role in executing Refco's more than $2.4 billion
fraud. COLLINS, 59, of Winnetka, Illinois, was found guilty on
July 10, 2009, following a nine-week jury trial of one count of
conspiracy, two counts of securities fraud, and two counts of
wire fraud in connection with his role in the fraud. The
sentence was imposed this morning in Manhattan federal court by
United States District Judge ROBERT P. PATTERSON, who also
presided over the trial.

According to documents filed in this case, the proof at
trial, and statements made in Manhattan federal court:

In August 2004, Thomas H. Lee Partners, L.P., purchased
a majority interest in Refco through a $1.9 billion leveraged
buyout ("LBO") transaction. The buyout was financed with
approximately $500 million in cash from Thomas H. Lee Partners,
$600 million in notes Refco sold to private investors, and
approximately $800 million borrowed from a syndicate of banks.
In August 2005, Refco conducted an initial public offering
("IPO") of its stock, and Refco's stock was then listed on the
New York Stock Exchange. Both the LBO and the IPO took place as
a result of a massive fraud scheme to steal more than $2.4
billion from potential investors and lenders. The scheme was
perpetrated by PHILLIP R. BENNETT, former Chief Executive Officer
and 50% owner of Refco, and others, with the knowing assistance
of COLLINS. As a result of the disclosure of a large relatedparty
debt owed by BENNETT to Refco, Refco went into bankruptcy
and its stock was delisted from the New York Stock Exchange only
months after the IPO.

Among other things, COLLINS participated in BENNETT's
scheme to falsify Refco's financial statements by hiding from the
company's auditors an enormous debt owed to Refco by a holding
company partially owned by BENNETT. Specifically, on at least 17
different occasions from February 2000 through October 2005,
COLLINS (and lawyers at his firm working at his direction)
drafted or caused to be prepared documents arranging for the
routing, through various third parties, of more than $5.5 billion
in loans from Refco to BENNETT's company. As COLLINS knew, and
as reflected in the documents, the loans were made shortly
before, and reversed shortly after, Refco's fiscal year- and
quarter-ends. During those brief periods, BENNETT used the loans
to pay down the debt his company owed to Refco, only to have the
debt return once these "Round Trip Loan Transactions" were
reversed. This process had the effect of concealing the size of
Refco's related-party debt as it made the debt owed by BENNETT's
company appear significantly smaller than it really was.

COLLINS also made affirmative misrepresentations and
drafted contract terms that misled others to believe BENNETT's
holding company owed Refco no more than approximately $108
million, which COLLINS falsely misrepresented would be repaid by
the time the LBO transaction closed. COLLINS knew that BENNETT's
holding company actually owed Refco at least $1 billion as of
January 2004, and that even after the LBO, BENNETT's holding
company would continue to owe Refco at least $300 million.

Additionally, COLLINS falsely represented to Thomas H.
Lee Partners and others that all material contracts and related party
transactions had been disclosed, while knowing that
documents relating to the Round Trip Loan Transactions -
including documents through which Refco guaranteed to third
parties the performance of BENNETT's company in amounts totaling
billions of dollars -- were never provided to Thomas H. Lee
Partners.

COLLINS also agreed with BENNETT to conceal the terms
of a 2002 agreement that resulted in the Austrian bank BAWAG
having an approximately 47% economic interest in Refco. The
terms were concealed because Thomas H. Lee Partners would not pay
as much for Refco if had known the terms of the agreement.
COLLINS, to achieve this concealment, directed others not to
disclose information relating to BENNETT's buyout of BAWAG's
interest under the 2002 agreement, and falsely represented to
Thomas H. Lee Partners that all material contracts and related
party transactions concerning Refco had been disclosed when
COLLINS knew that the 2002 agreement had been concealed.

COLLINS also created fraudulent corporate documents for
Refco, which he provided to Thomas H. Lee Partners, that
additionally concealed from Thomas H. Lee Partners BAWAG's true
economic interest in Refco. COLLINS further agreed to mislead
Thomas H. Lee Partners and its representatives into believing
that Refco possessed approximately $500 million in excess working
capital when he knew that approximately $390 million of this
money was really funded by an overdraft loan from the Austrian
bank BAWAG.

To date, several former executives of Refco have been
charged and sentenced for their participation in the fraud:

On July 3, 2008, BENNETT, 61, of Gladstone, New Jersey,
was sentenced to 16 years in prison by United States
District Judge NAOMI REICE BUCHWALD. BENNETT pleaded
guilty on February 15, 2008, to all 20 charges filed
against him.

On August 7, 2008, TONE N. GRANT, 65, of Chicago,
Illinois -- one of the former owners of Refco -- was
sentenced to 10 years in prison by Judge BUCHWALD. On
April 17, 2008, GRANT was found guilty after trial in
Manhattan federal court on all five counts in the
Indictment against him.

On February 20, 2008, ROBERT C. TROSTEN, 40, of
Sarasota, Florida -- the former Chief Financial Officer
of Refco -- pleaded guilty before Judge BUCHWALD to
five counts charged in the Indictment against him. He
is scheduled to be sentenced on May 4, 2010.

On December 19, 2007, SANTO C. MAGGIO, 58, of Naples,
Florida -- a former Executive Vice President of Refco
and the former President and Chief Executive Officer of
Refco Securities LLC, a Refco subsidiary -- pleaded
guilty before United States Magistrate Judge RONALD L.
ELLIS to a four-count Information. He is scheduled to
be sentenced on May 27, 2010.

U.S. Attorney BHARARA stated: "Joseph Collins was more
than a corrupt attorney who turned a blind eye to his client's
actions. He played an instrumental role in Refco's staggering
fraud and epic collapse. In his position both as Refco's longterm
counsel and within the legal community, Collins was uniquely
placed to lend his hand to truth or treachery. He chose
treachery, and today faces the consequences of his choice. This
Office, along with our partners at the U.S. Postal Inspection
Service and the SEC, will continue to aggressively pursue those
who facilitate financial fraud, whatever their station."

Mr. BHARARA, a member of the President's Financial
Fraud Enforcement Task Force, praised the efforts of the United
States Postal Inspection Service and the Criminal Investigators
of the United States Attorney's Office, and thanked the
Securities and Exchange Commission and the Commodity Futures
Trading Commission for their assistance in the investigation of
this case.

Assistant United States Attorneys CHRISTOPHER L.
GARCIA, SHARON COHEN LEVIN, JEFFREY ALBERTS, and AMY LESTER are
in charge of the prosecution.